The Legal & Financial Environment - Report Writing - Finance Assignment Help

Assignment Task

Client 1: Power Direct
In the months where the cash balance is negative, Power Direct would like your expert advice on how the cash balance could be improved. Write a short report to Power direct stating:
Why it is important to have a strong cash balance for a company like Power Direct.
What are the precautionary measures that the Power Direct can follow in the months where cash balance could be negative. You need to suggest both cost management measures and funding measures to Power Direct.

Client 2: Pippa Photography
Pippa runs a photographic studio. Clients book a one-hour studio session and are entitled to receive two large photographs of their choice form the sitting. Pippa has provided the following information regarding her business:
The rent of the studio is £12,000 per annum.
Pippa employees two full-time photographers, each paid a salary of £22,000 per annum.
She employs one photographic technician for one day a week. He is paid £120 per day, £6,240 per annum.
Advertising costs are £550 per annum.
Electricity costs are £1,100 per annum plus £4 per client hour. Each sitting takes two hours.
Pipa works as a receptionist and general manager of the business and is paid £16,000 per annum.
Fixtures, fittings, and equipment originally cost Pippa £12,800 and will depreciate by £2,500 per annum.
Pippa expects to have 1,300 sittings per year; each sitting is charged at £80.
 

Required:
Identify Pippa’s fixed cost and calculate the total fixed cost she will incur each year.
Explain the characteristics of fixed and variable cost to Pipa and the importance of accurately identifying the fixed and variable cost to the business.
Comment on the level of fixed costs compared to variable costs and the implications of this for the business.

Client 3: _Sam’s Direct
Sam’s Direct is in the business of manufacturing sports equipment. The owner, Sam is looking for a possibility to manufacture tennis racquets. Sam is aware that, before investing in this venture, he needs to see if this is going to be profitable or not. He would like you to review his cost forecast and produce a feasibility study of this project to decide whether or not he should undertake this new project.
Sam has already done a great deal of research into the costs involved. Sam anticipates that the costs of producing tennis racquets would be:
Hire of machine £550 per month
Material cost £8.50 per racquet
Labour cost
Racquet framing
Racquet stringing £9 per hour
The machine requires one person to operate it. Four racquets can be framed every hour.
Staff who string racquets can string two racquets in an hour.
Estimated Selling Price £25 each
Start by explaining to Sam what the Break-even analysis is and how will this help him to make business decisions.
Calculate the break-even analysis for Sam 
Calculate expected profit if Sam is able to sell 1,100 racquets
Provide your opinion about the feasibility of the project

Client 4: Ming’s Market Stall
Ming has been running market stalls in Greenwich and Camden for some years. The stall sells hats and fans to tourists visiting the historic Greenwich and Camden town. Ming wors on the stall for three days a week and employs her younger sister to run the stall for the remaining three days a week that the market is open. Her trial balance as at 31 March 2019 shown in the table:
Details
Dr/£ Cr/£
Motor vehicle
75,000 Trade Receivables 5,270
Bank overdraft 540
Inventories as at 1 April 2018 59,830
Sales 446,660
Purchases 239,190
Rent 18,500
Wages 173,850
Other expenses 23,230
Capital as at 1 April 2018 252,800
Drawings 105,130
700,000 700,000
Further information:
Trade receivables arose from sales made on credit to a nearby hotel.
Closing inventories on 31st March 2019 were valued at £63,000
Two months’ stall rental had been paid in advance at the year-end. Rent is currently paid at the rate of £1,740 per month total for both locations.
Wages owning at 31 March 2019 amounted to £5,550.
 

Required:
Comment on the profitability of the business and suggest how it might be improved. (250 words)
Prepare the Statement of Comprehensive Income and Statement of Financial Position as at 31 March 2019.

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